The NAV of the Units of the Scheme will be computed by dividing the net assets of the Scheme by the number of Units outstanding on the valuation date.
The Fund shall value its investments according to the valuation norms, as specified in the Eighth Schedule of the Regulations, or such guidelines / recommendations as may be specified by SEBI from time to time. The broad valuation norms are detailed in the Statement of Additional Information.
NAV of Units under the Scheme will be calculated as shown below:
NAV=
Market or Fair Value of Scheme’s investments +
Current assets including Accrued Income -
Current Liabilities and provisions including accrued expenses No. of Units outstanding under the Scheme/Option.
NAV for the Scheme and the repurchase prices of the Units will be calculated and announced at the close of each Business Day. The NAV shall be computed upto four decimals.
Computation of NAV will be done after taking into account dividends declared, if any, and the distribution tax thereon, if applicable. The income earned and the profits realized in respect of the Units remain invested and are reflected in the NAV of the Units.
VI. FEES AND EXPENSES
This section outlines the expenses that will be charged to the scheme. New Fund Offer (NFO) expenses
These expenses are incurred for the purpose of various activities related to the NFO like marketing and advertising, Brokerage, registrar expenses, printing and stationary, bank charges etc.
The New Fund Offer expenses of the scheme have been borne by the AMC. Total Expense Ratio (TER)
Total Expense Ratio is the total of ongoing fees and operating expenses charged to the scheme, expressed as a percentage of the scheme’s daily net assets.
These fees and expenses include Investment Management and Advisory Fee charged by the AMC, Registrar and Transfer Agents’ fee, brokerage/commission, marketing and selling costs etc
The AMC has estimated following recurring expenses, as summarized in the below table for the scheme. Total expense ratio of the Scheme (including investment and advisory fees) will be subject to the maximum limits (as a percentage of Daily Net Assets of the Scheme) as per Regulation 52(6) & (6A), as amended from time to time, with no sub-limit on investment and advisory fees.
Expenses Structure
% of daily Net Assets Investment Management and Advisory Fees
Upto 2.25% Trustee fee
Audit fees Custodian fees RTA Fees
Marketing & Selling expense incl. agent commission Cost related to investor communications
Cost of fund transfer from location to location
Cost of providing account statements and dividend redemption cheques and warrants
Costs of statutory Advertisements
Cost towards investor education & awareness (at least 2 bps)
Brokerage & transaction cost over and above 12 bps and 5 bps for cash and derivative market trades resp.
Service tax on expenses other than investment and advisory fees Service tax on brokerage and transaction cost
Other expenses (including listing expenses) As permitted under the Regulation 52 of SEBI (Mutual Funds) Regulations, 1996
Maximum total expense ratio (TER) permissible under Regulation 52
(6) (c) (i) and (6) (a) Upto 2.25%
Additional expenses for gross new inflows from specified cities
Expense Structure for Direct Plan - The annual recurring expenses will be within the limits specified under the SEBI (Mutual Funds) Regulations, 1996.
Commission/ Distribution expenses will not be charged In case of Direct Plan. The TER of Direct Plan will be lower by at least 15% vis-à-vis Regular Plan. Eg:If the TER charged in the Regular Plan is 0.20% (20 basis points)of the daily net assets then the TER charged in the Direct Plan shall not exceed 0.17% (17 basis points) of the daily net assets.
The maximum total expenses of the scheme under Regulation 52(6)(c) shall be subject to the following limits:
Daily Net Assets (Rs.) %
First 100 crores 2.25%
Next 300 crores 2.00%
Next 300 crores 1.75%
Balance assets 1.50%
Additional expenses which may be charged to the Scheme:
The following additional expenses may be charged to the Scheme under Regulation 52 (6A), namely-
• Brokerage and transaction costs (including service tax) which are incurred for the purpose of execution of trade and is included in the cost of investment, not exceeding 0.12 per cent in case of cash market transactions and 0.05 per cent in case of derivatives transactions. Any payment towards brokerage and transaction cost, over and above the said 12 bps and 5bps for cash market transactions and derivatives transactions respectively may be charged to the scheme within the maximum limit of Total Expense Ratio (TER) as prescribed under regulation 52. Any expenditure in excess of the said prescribed limit (including brokerage and transaction cost, if any) shall be borne by the AMC.
• Expenses not exceeding of 0.30 % of daily net assets, if the new inflows from beyond top 15 cities are at least:
(i) 30 % of gross new inflows in the scheme; or
(ii) 15 % of the average assets under management (year to date) of the scheme; whichever is higher.
Provided that if inflows from such cities is less than the higher of sub-clause (i) or sub- clause (ii), such expenses on daily net assets of the scheme shall be charged on proportionate basis. Provided further that expenses charged under this clause shall be utilized for distribution expenses incurred for bringing inflows from such cities.
Provided further that amount incurred as expense on account of inflows from such cities shall be credited back to the scheme in case the said inflows are redeemed within a period of one year from the date of investment.
Service Tax:
Service Tax on investment and advisory fees may be charged to the scheme in addition to the maximum limit of TER as prescribed in Regulation 52(6)(c). Service tax on other than investment and advisory fees, if any, shall be borne by the scheme within the maximum limit of TER as per Regulation 52.
The aforesaid estimates are made in good faith by the Investment Manager and are subject to change inter se among the various heads of expenses and between the Plans. It may also be noted that the total expenses of the Plans will also be subject to change within the overall limits of expenses under Regulation 52. Actual expenses under any head and / or the total expenses may be more or less than the estimates. The Investment Manager retains the right to charge the actual expenses to the Fund, however the expenses charged will not exceed the statutory limit prescribed by the Regulations. Any expenditure in excess of the limits specified in Regulation 52 shall be borne by the AMC. There will be no sub limit on management fee, and it shall be within the overall TER specified above.
For the actual current expenses being charged, the investor may refer to the website of the mutual fund.
Illustration of impact of expense ratio on scheme return:
Assumed 1 year Simple Average Return of the Scheme before
expenses 15%
Assumed Average TER Expense of the scheme for the year (%) 2% Average Return after charging the expense 13%
Illustration is given to understand the impact of expense ratio on a scheme return and this should not be construed as an indicative return of the scheme.